Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. You could sustain a loss of some or all of your initial investment and should not invest money that you cannot afford to lose. The risks of loss from investing in CFDs can be substantial and the value of your investments may fluctuate. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how this product works, and whether you can afford to take the high risk of losing your money. IG International Limited is licensed to conduct investment business and digital asset business by the Bermuda Monetary Authority.

EUR/USD falls again as greenback consolidates gains

We assess the price action for EUR/USD in the wake of some bullish momentum for the US dollar to start the week. Having been rejected at multi-week highs above $1.10, traders have sent the euro back below $1.09.

EUR/USD posts second straight decline to start the week

EUR/USD continued its decline from one-month highs above $1.10 last Friday, amid a renewed round of US dollar strength to start the week

In early morning UK trade, the euro had fallen back below $1.09 after struggling to hold its ground above that level during the Asian session on Tuesday.

The price action was reflective of continued strength in the USD, which was initially sparked by a bout of risk-off sentiment on Monday following hawkish anti-China comments from US President Donald Trump's administration over the weekend.

With US-China tensions adding to the challenging economic outlook stemming from the Covid-19 pandemic, it’s been a rough start to the week for risk assets.

Currency traders brushed off another poor round of US economic data, as factory orders slumped by a record 10.3% in March, against expectations of a 9.7% fall.

The US dollar index traded near recent highs above 99.50 on Tuesday, with no major catalysts to spark a material move in any of the major trading pairs.

EUR/USD looking for support after rejection at $1.10

European data was also soft on Monday, as manufacturing PMIs for the eurozone fell to just 33.5 while the EU Sentix Investor Confidence index slumped to a reading of -41.8.

Looking at the day ahead, the EU Commission is scheduled to release its latest set of growth forecasts on Tuesday.

Key data out of the US will be led by the March trade balance and the ISM measure of activity levels in non-manufacturing sectors for April.

Despite the broader risk-off appetite, US stocks edged higher on Monday and futures markets for the FTSE, EuroSTOXX600 and the S&P 500 indices are all indicating further gains ahead on Tuesday.

Having failed to break above $1.10, EUR/USD remains under downside pressure as traders test support levels below $1.09.

From a technical standpoint, further declines are expected if the euro fails to hold above $1.088.

Ready to start trading EUR/USD? Open a live account or practise using a demo version today.

This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. Any research provided should be considered as promotional and was prepared in accordance with CFTC 1.71 and designed to promote the independence of investment research. See our Summary Conflicts Policy, available on our website.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.8 pips on EUR/USD
  • Analyze market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on the most popular forex markets


Prices above are subject to our website terms and agreements. Prices are indicative only

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading forex provider.

Stay on top of upcoming market-moving events with our customisable economic calendar.